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3 Things The Bank Won’t Tell You About Loan Modifications And Why They Fail

Here’s The Top 3 Myths Of Loan Modification Programs And What You Should Know Before You Start!

 Maybe you’ve heard a good option for foreclosure is a loan modification.  Maybe you’ve even gotten letters in the mail by an attorney trying offering their services asking you to pay money upfront.

 Here are some critical things to know if you are considering a loan modification that can save you a lot of time, money and aggravation.

 “Will the bank will reduce my balance?”

Banks add on all the missed payments, fees, and penalties to the back end of the loan making you even more “upside down”. Can your home ever be worth what is owed?

“My attorney says they can fix everything”

Attorney’s have a role, but unless are willing to make up all the back payments, attorneys can only delay the end result, foreclosure! Does it make financial sense to pay an attorney to hold onto a home that is upside down?

“The bank agreed to do a trial loan modification”

What does this really mean? This is just another form of debt collection by the bank.  According to bankrate.com, less than 13% of trial loan modifications become permanent.

Warning:  Banks do not stop the foreclosure process during your trial loan modification.

So, what if you’ve already been accepted for a trial loan modification, you have made your payments and then you’ve been declined a permanent modification.  By his time, the foreclosure process has already been filed leaving the homeowner with no other options.

If you would have done a short sale upfront, you would actually be saving money by not making the temporary reduced payments and paying an attorney. Maybe a better solution is to bypass this tedious and costly process and list your home as a short sale.

Strapped for cash? There are no upfront costs for a consultation with an attorney who can advise you on your best legal options.

Contact a Certified Short Sale Specialist Realtor in Tampa Bay that can guide you through the process of getting your home sold. Most people don’t know that Realtor’s fees are paid by your mortgage company, and you will be required to list your home with a real estate agent.

See Also: Common Short Sale Questions Answered

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Written by Rae Catanese, Realtor

Licensed Realtor since 2002, Tampa Bay’s own Rae Catanese regularly gives expert advice and insider tips about the Tampa Bay real estate market via her blog, The Tampa Real Estate Insider. If you are thinking of buying or selling a home in the Tampa, St. Petersburg or Clearwater areas-then this blog is for you. I typically post articles once a week. To make sure you don’t miss my newest posts, you can subscribe here! Have a real estate question? Email me here!

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